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Hu Jintao, China’s President, visited the US a few weeks ago. Fifty years from now, political historians will devote little attention to the visit. Economic historians will feel otherwise.

The most remarkable thing about the visit was the degree of involvement by private sector American business, and the general absence of a political agenda on the part of the federal government.Hu Jintao’s visit to Seattle and dinner at Bill Gates house was far more productive than his visit to Washington. This isn’t a bad thing. If American business becomes closely coupled with China our government will follow. Citizens of both nations will benefit from strong economic ties between the two superpowers.

I know this is a broad, long-term generalization, but my observation has been this:

In China, Business and Citizens are bent to the will of the Government

In America, the Government is bent to the will of Business and the People.

Therefore, the following quote from Jintao carries a great deal of weight, and I believe foreshadows the fortunes of Microsoft (MSFT) in China.

“Bill Gates is a friend of China, and I am a friend of Microsoft,”

The above quote was in the context of intellectual property protection. From Financial Times:

Hu Jintao, Chinaâ€™s president, said on Tuesday the protection of intellectual property rights was â€œessentialâ€ for Chinaâ€™s development and its ability to build an economy based on innovation rather than low-cost manufacturing.

This will indeed happen one day. When it does, Microsoft is going to do well monetizing the 9 out of 10 copies of Windows that are pirated.

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